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Germany to start paying out €300 coronavirus ‘Kinderbonus’ in three weeks

Families in Germany are to receive the first instalment of a one-off payment – the 'Kinderbonus' – on September 7th.

Published: 17 August 2020 11:18 CEST

Germany to start paying out €300 coronavirus 'Kinderbonus' in three weeks

Photo: DPA

The planned Kinderbonus of €300 per child is to be transferred in two instalments.

The first €200 will be transferred alongside child benefit (Kindergeld) from September 7th. A further €100 will be paid to families in October, the Finance Ministry said.

Originally, the government had planned to transfer the cash in two €150 instalments.

The date the money will reach bank accounts depends on the final digit of your child benefit number.

If the number ends in a zero you will receive the first instalment on September 7th. Those with higher numbers (from 1-9) will gradually receive the transfer throughout the month.

In total, there are about 18 million children and young people in Germany who are entitled to child benefit and, therefore, the Kinderbonus.

Explained: How does Germany's Kinderbonus coronavirus payment work?

“This is a welcome financial injection for many families,” Family Minister Franziska Giffey, of the Social Democrats (SPD) told the Funke Group newspapers.

The Kinderbonus is part of a €130 billion economic stimulus package aimed at kick-starting the economy and supporting people in Germany.

The move is particularly aimed at families struggling to make ends meet through the crisis.

“The Kinderbonus makes the decision to buy something for children or doing something together a little easier,” said Giffey. It's also hoped it will boost the hard-hit economy in the short-term.

The payment is viewed as a thank you to parents who had to take over the teaching and care of their children when schools and kindergartens closed to stem the spread of Covid-19.

The federal government has estimated the cost of the bonus at around €4.3 billion.

Families with small and medium incomes are to benefit, as the payment will not be offset against other family or social benefits.

In the case of tax, however, the bonus payment will be offset against child tax credits, so that high incomes will not benefit from the special one-off payment.

READ ALSO: How Germany's new multibillion aid package will benefit you

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A young girl with a piggy bank

A young girl with a piggy bank. Photo: picture alliance/dpa | Patrick Pleul

The outlook for families in Germany

According to a recent report on families and finance by German payments provider Mollie, there are 11.4 million family households in Germany at the moment. Around 35.6 percent of these households have just one child, while 26.5 percent have two, and the rest have three or more.

Children under the age of 18 live in 8.2 million family households, and in the remaining 3.4 million households, families live with adult children.

When it comes to the birthrate, Germany general falls in the middle of other European countries, with each woman having an average of 1.54 children.

The so-called lockdown baby boom may be having some impact on the numbers: in March 2021, more than 65,000 babies came into the world in Germany. This is the highest number of newborns the country has seen in a single month since 1998.

However, the authors of the study say the link between the birthrate and Covid may be a little more complex than that. While there were indeed record births in March, the birthrate only crept up by around 1.4 percent in the first part of the year as a whole.

“This suggests that the pandemic has had little to no impact on family planning,” they explained. “Though families and couples may be keeping a closer eye on their finances and planning their spending more carefully since the pandemic.

“However, since there also hasn’t been a dramatic decline in births, current financial constraints nevertheless don’t seem to be having an impact on births in Germany either.”

READ ALSO: EXPLAINED: Everything you need to know about parental leave in Germany

Cost of raising a child

Many parents will tell you that you can’t put a price on having children, but the Federal Statistical Office (Destatis) would beg to differ. According to the latest data, raising a child in Germany will set you back around €148,000 by the time they turn 18 – and the costs increase along with the child’s age.

Here are the average annual costs of raising a child by age, according to Destatis:

0-6 years old: €7,000 per year
6-12 years old: €8,200 per year
12-18 years old: €9,400 per year

So, what are the main expenses involved in raising a child? According to Destatis, food, education and the cost of childcare in the first years of life all make a major dent in the family budget. Then, as children get older and develop other hobbies and interests, spending on leisure, entertainment and culture tends to also increase.

When comparing affluent families with low-income families, there was a clear difference in how much was spent on raising children. In 2018, poorer families spent an average of €424 per month on each child. Wealthy families, on the other hand, spent €1,212 euros – almost three times as much.

What about pocket money?

Though it’s definitely not the largest expense involved in bringing up a child, many parents grapple with the question of how much pocket money to give their children. Luckily, the German Youth Institute (DJI) has recommendations on that, conveniently divided into different age groups as the chart below shows.

Chart showing recommended pocket money for kids

Chart showing the recommended pocket money for children at different ages. Source: German Youth Institute

For small children under the age of six, for example, €0.50 to €1 a week is the recommended pocket money, while teenagers aged 14-17 years should get between €26 and €63 a month, depending on their exact age.

By giving children pocket money each month, parents can teach them how to manage money better at an early age. With a fixed monthly amount, they ideally start to understand what they can afford and what they can’t, and also learn to prioritise the things they want or need the most.

In addition to pocket money, DJI also suggests parents set aside a monthly budget for the child’s other expenses that can be managed by either them or older children. Adjusted for inflation in 2020, this budget includes €30-50 a month for clothes and shoes, €20-30 for eating out, €15-20 for public transport, €10-20 for a phone contract or credit, and €5-10 for stationary and toiletries respectively.

What financial help is there?

Though raising a child may feel financially unmanageable for some, Germany does have a wide range of government benefits available – especially for lower income and single parents.

Parents in Germany can access child benefits (Kindergeld), maternity benefits, parental allowance and tax relief while bringing up a child. From Kindergeld alone, parents receive €219 per child for their first and second child, which goes up to €225 for the third child and €250 for additional children after that.

A mother and child
A mother looks after her child while working from home. There are many sources of financial help available for single and low-income parents in Germany. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

Single parents also have the option of getting an advance on maintenance payments from the government if the other parent fails to meet their obligations. The Federal Foundation ‘Mother Child’ (Mutter Kind) also offers help to mothers with small incomes in particular.

The state also provides special support for families with low incomes, such as stipends for education and participation so that the child can take part in cultural and educational activities.

READ ALSO:

Financial support for pupils and students

For 50 years now, the Federal Government has been providing students with financial support for their education.

Regardless of the financial situation of their parents, young people receive BAföG, the so-called Federal Training Assistance Act (Bundesausbildungsförderungsgesetz), during the period of their training and studies.

Since the start of 2020/21 Winter Semester, the maximum BAföG stipend has been €861 euros per month, provided the student doesn’t live with his or her parents and financial assistance from the family is no longer possible.

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